BurmaReport 28January2010


1 Institute for Science and International Security B ISIS I RIEF MAGERY January 28, 2010 Burma: a Nuclear Wan n ab e, Suspicious Links to North Korea and - High Tech Procurements to Enigmatic Facilities By David Albright, Paul Brannan, Robert Kelley, and Andrea Scheel Stricker For several years, suspicions have swirled about the nuclear intentions of Burma’s secretive military dictatorship. Burma is cooperating with North Korea on possible nuclear procurements and appears - of to be misle ading overseas suppliers in obtaining top line equipment. Certain equipment, - - the which could be used in a nuclear or missile program, went to isolated Burmese manufacturing compounds of unknown purpose. Although evidence does not exist to make a compe lling case that Burma is building secret nuclear reactors or fuel cycle facilities, as has been reported, the information does warrant governments and companies taking extreme caution in any dealings with Burma. The military regime’s suspicious links to N orth Korea, and apparent willingness to illegally procure high technology goods, make a priority convincing the military government to accept greater transparency. Suspicions about nuclear intentions followed an agreement by Russia to sell Burma a resear ch reactor in 2001 and intensified in 2007 with the resumption of a formal military relationship between North Korea and Burma, known officially as Myanmar. Secretary of State Hilary Clinton said in July 2009, “We know there are also growing concerns abou t military cooperation between North Korea and 1 According to U.S. officials, these concerns extend to possible Burma, which we take seriously.” 2 nuclear cooperation, but their information is incomplete. The evidence supports that Burma and North Korea ha ve discussed nuclear cooperation, but is not sufficient to establish that North Korea is building nuclear facilities for Burma’s military junta, despite recent reports to the contrary. Korean nuclear assistance to this Nonetheless, no one can ignore the possibility of significant North enigmatic, military regime. Because North Korea secretly sold a reactor to Syria, a sale which the world’s best intelligence agencies missed until late in the reactor’s construction, no one is willing to to the possibility of North Korea selling nuclear equipment, materials, or facilities to turn a blind eye Burma. North Korea’s past proliferation activities and the failure to promptly detect the Syrian ht sell Burma a reactor or reactor cannot but lead to more scrutiny over whether North Korea mig other nuclear industrial equipment and facilities, or the means and guidance to manufacture nuclear facilities. When one adds Burma’s own efforts to acquire abroad sophisticated dual - use goods that 1 The Washington Post , Glenn Kessler, “Clinton: U.S. Wary of Growing Burmese, North Korean Military Cooperation,” July 21, 2009. 2 Ibid. 236 Massachusetts Avenue, NE, Suite 500 Washington, DC 20002 .3634 TEL 202.547.3633 • FAX 202.547 - online.org E online.org • www.isis - - MAIL [email protected]

2 ses, it becomes essential to determine and constrain as necessary the can be used for nuclear purpo military junta’s nuclear intentions. Another dimension is whether Burma is helping North Korea obtain items for its nuclear programs. artner for goods ultimately destined for North Burma could act as a cooperative transshipment p Korea’s gas centrifuge uranium enrichment program. The military regime’s lack of transparency and repressive actions complicate any effort to investigate getting the military government to accept greater suspicions about its nuclear program. A priority is transparency of its activities. use goods internationally, governments - Because Burma is buying a wide variety of suspicious dual requests for equipment, and companies need to be more vigilant in examining Burma’s enquiries, or whether via Burmese governmental entities, Burmese trading companies, or other foreign trading companies. Companies should treat enquiries from Burma no differently than those from Iran, Pakistan, or Syria. ility Minimal Nuclear Capab Currently, Burma has little known indigenous nuclear infrastructure to support the construction of nuclear facilities. Nonetheless, it has sought to purchase a nuclear research reactor for about a decade. tional Atomic Energy Agency (IAEA) for assistance in In September 2000, Burma asked the Interna 3 The IAEA said that it would assist in such an endeavor once Burma acquiring a research reactor. achieved a set of milestones, including bringing its reactor safety and regulatory infrastructure up to a minimally acceptable standard. Meanwhile, without telling the IAEA, Burma started negotiations 4 with Russia over the supply of a ten megawatt - thermal research reactor. A draft cooperation agreement was approved by Russia in May 2002 for the construction of a nuclear research center thermal research reactor, two laboratories (believed to include that would include a ten megawatt - hot cells for radioisotope production), and facilities for the disposal of nuclear waste. However, the represent an approved sale. The two countries finally signed a nuclear draft agreement did not cooperation agreement in 2007 for the sale of the reactor complex, but no construction of the 5 research center had started as of September 2009. announced In addition, neither side has publicly the planned location of this reactor project. Under the terms of its cooperation, Russia has reportedly conducted training of Burmese in fields related to the building and operation of research reactors. Burma receives a relatively small lev el of technical assistance from the IAEA in nuclear medicine, agriculture, and fields related to research reactors. It also receives nuclear energy training in South Korea with other members of the Association of Southeast Asian Nations (ASEAN). 3 A officials, January 28, 2002. Briefing to ISIS staff by IAE 4 Ibid. 5 “Statement of the Leader of the Myanmar Delegation J.E. U Tin Win to the 53rd Annual Regular Session of the IAEA - General Conference,” International Atomic Energy Agency, Vienna, September 14 18, 2009. ISIS R EPORT P a g e 2 |

3 ng to a European intelligence official, Russia assists Burma’s uranium exploration and mining Accordi scale and has not extended into the construction of a - efforts, but this effort is relatively small nergy lists five areas with potential uranium mill to process uranium ore. The Myanmar Ministry of E for uranium mining: Magwe, Taungdwingyi, Kyaukphygon (Mogok), Kyauksin, and Paongpyin 6 (Mogok). Minimal Nuclear Transparency - Burma joined the Nuclear Non Proliferation Treaty (NPT) in 1992. It insists it is in comp liance with all its obligations under the NPT. Evidently in reaction to published reports in the summer of 2009, a Burmese official denied seeking nuclear weapons to Senator Jim Webb on his trip to Burma in August 7 2009, which was the first visit by a seni or U.S. official in a decade. Burma has a traditional INFCIRC 153 comprehensive safeguards agreement with the IAEA supplemented by a Small Quantities Protocol (SQP) that it signed in 1995. The SQP is in effect since clear facilities and only small quantities of nuclear material. Burma has declared it has no major nu Under the SQP, the IAEA has agreed not to implement safeguards with a few exceptions, mainly conditions aimed at determining when to implement the safeguards procedures in the greement. These conditions include Burma agreeing to report if it imports or comprehensive a exports nuclear material, acquires more than a minimal amount of nuclear material, or has built a n the case of the reactor new nuclear facility that is within six months of receiving nuclear material. I from Russia, Burma would implement the full safeguards agreement, no later than six months before receiving nuclear reactor fuel. 8 Burma has discussed improving safeguards with the IAEA in the context of the reactor purchase. However, Burma has not agreed to update its commitments under the SQP. In particular, it has not agreed to report a nuclear facility when it decides or authorizes its construction rather than six months before Burma introduces nuclear material in the faci lity. Moreover, it has not agreed to the Additional Protocol, which would obligate Burma to provide far greater information about its nuclear activities and plans and allow the IAEA much greater access to Burmese sites. Implementation of the Additional P rotocol could go far in reducing suspicions about reports of undeclared nuclear facilities or materials. In a new development, it is understood that Burma has indicated an interest in joining the hich came into operation in October 2009. Asia/Pacific Safeguards Network, an Australian initiative w This network, which comprises authorities and agencies working in safeguards, has yet to consider if Burma should be invited to join. urity Council A new constraint on Burma’s cooperation with North Korea is United Nations Sec Resolution 1874, which was passed in mid 2009. It prohibits member states from engaging in trade - with North Korea in almost all conventional weapons and in sensitive areas, including those related to the Burmese leadership has stated its commitment to fully ballistic missiles and nuclear. Although 6 Myanmar Mini stry of Energy, “Nuclear Energy: Uranium Ore Deposits of Myanmar.” http://www.energy.gov.mm/nuclearenergysubsector.htm 7 Public Radio. August 24, 2009. Transcript of radio Michael Sullivan, “Does Myanmar Want Nuclear Weapons,” National broadcast. 8 Statement of the Leader of the Myanmar Delegation to the IAEA General Conference.” “ ISIS R EPORT P a g e 3 |

4 comply with UNSC Resolution 1874, U.S. officials have expressed worries about the “nature and 9 extent” of Burma’s ties with North Korea. Because transparency remains so minimal, the fundamental question remains: has Burma decided to embark on a covert route to nuclear weapons on its own or with the help of North Korea? Burma’s lack of transparency complicates efforts to understand a range of suspicious procurements and — be separated into two broad areas alleged undeclared nuclear activities reports. These claims can or facilities and suspicious or illegal procurement activities. Alleged Undeclared Nuclear Activities or Facilities med that there are covert nuclear Various dissident groups, researchers, and news reports have clai sites in Burma, including reactors, uranium mines and mills, reprocessing plants, and uranium enrichment facilities. As far as could be determined, the evidence behind many of these claims is largely based on interviews w ith defectors or analysis of ground photos and overhead imagery of suspected sites. The opposition group Dictator Watch (dictatorwatch.org) has published a range of sites it says are 10 Another researcher, Bertil Lintner, has published a series o nuclear. - f photographs taken in the mid 11 2000s of an extensive series of tunnels built with North Korean assistance. He has suggested that - related. More recently, Australian researcher Desmond Ball and some of these might be nuclear - n journalist Phil Thorton, citing defector accounts, claimed in the based Irish - Thailand Australia that Burma is building two secret nuclear reactors; one already built with Sydney Morning Herald Russian assistance, (a claim Ball later backed away from in an article in the Australian jo Security urnal 12 ) and another one being built with the help where he instead details the plans to build it Challenges 13 In addition, Ball and Thorton of North Korea, which will be secret and used for military purposes. reported that based on the defectors’ statements Burma is building or plans to build secret plutonium separation plants, uranium refining and enrichment plants, and facilities to develop and produce the nuclear weapon itself. Dictator Watch head Roland Watson claims that much of Ball and 14 Thor ton’s information was published earlier by Dictator Watch, relying on the same defectors. The nuclear allegations in these reports are not in general confirmed. As the Australian researchers ctors must be approached admit, any information based on interviews with Burmese defe 9 ommittee on Kurt Campbell, Assistant Secretary, Bureau of East Asian and Pacific Affairs, Statement Before the House C Foreign Affairs, Washington, D.C., October 21, 2009. 10 For an example of an alleged uranium mine and mill, see DictatorWatch.org , March 2007, http://www.dictatorwatch.org/ph shows/burmafacility.html . 11 Bertil Lintner, “Burma’s Nuclear Temptation,” YaleGlobal Online, December 3, 2008: http://yaleglobal.yale.edu/display.article?id=11673 . Bertil Lintner, “Tun nels, Guns and Kimchi: North Korea’s Part 1,” YaleGlobal Online, June 9, 2009: . http://yaleglobal.yale.edu/display.article?id=12442 Quest for Dollars – 12 Desmond Ball, “Burma’s Nuclear P , Vol. 5, No. 4 (Summer 2009). rograms: The Defectors’ Story,” Security Challenges . http://www.securitychallenges.org.au/ArticlePages/vol5no4Ball.html 13 , August 1, 2009, The Sydney Morning Herald hil Thorton, “Burma’s Nuclear Secrets,” Desmond Ball and P nuclear - http://www.smh.com.au/news/world/burma82 - 17s secrets/2009/07/31/1248977197670.html?page=fullpage#contentSwap2 14 Letter to Desmond Ball and Phil Thorton from Roland Watson, DictatorWatch, August 3, 2009. . www.dictatorwatch.org P a g e ISIS R EPORT 4 |

5 15 cautiously. The sheer number of alleged secret sites posited by these defectors by itself raises doubts about their claims. Only in a few cases do the reports listing nuclear sites have enough information to assess their veraci ty using satellite imagery. In these cases, however, where ISIS could identify specific sites claimed to be nuclear, it assessed that the sites were not in fact nuclear facilities. ISIS reviewed the ground photographs of suspected tunnel facilities in Burma obtained by Bertil Lintner and published on YaleGlobal Online and determined that at least one of the purported tunnel entrances is a dam 16 penstock (see figure 1). Other photographs do indeed depict tunnel entrances and indoor storage facilities, but are likely not nuclear industrial facilities. ISIS could not identify any nuclear industrial characteristics in the photos. DictatorWatch.org and cited by the ISIS assessed claims made by of a covert Sydney Morning Herald 17 After an analysis of available satellite and ground uranium mine and mill near Mandalay in Burma. that the suspected uranium mill was too imagery and relevant open source information, ISIS assessed large to be a small clandestine uranium operation, and ground photographs of an established ery closely with the overhead imagery claimed by DictatorWatch commercial cement plant matched v 18 ISIS also assessed that the suspected uranium mine was probably a to depict the uranium mill. quarry, judging by the piecemeal scraping marks in the mountain. A covert uranium mine would - ely utilize modern open lik pit or underground mining techniques. ISIS does not want to overweigh the importance of debunking a few claims about secret nuclear facilities in Burma. There remain legitimate reasons to suspect the existence of undeclared nuclea r activities in Burma, particularly in the context of North Korean cooperation. But the methods used in the public domain so far to identify existing suspect Burmese nuclear facilities are flawed. Identification of suspect nuclear sites requires a more r igorous basis than is currently evident. Suspicious or Illegal Procurement Activities Burma is judged as unable to build nuclear facilities on its own. As a result, it must depend on outside suppliers for nuclear technology, equipment, materials, and facilities. Therefore, detecting suspicious Burmese procurements is potentially an important indicator of undeclared nuclear materials and facilities. notch, highly sophisticated goods with potential Burma is seeking abroad a large quantity of top - le and nuclear uses. Yet, no pattern has emerged in these procurements that lead to a specific missi missile or nuclear end use. Nonetheless, the procurements are often suspicious or highly enigmatic, according to one senior European intelligence official. The Burmese military regime might use North Korean trading entities to acquire overseas sensitive nuclear and nuclear dual use goods. Its military cooperation with North Korea has increased over the 15 “Burma’s Nuc lear Programs: The Defectors’ Story.” 16 - Imagery Brief of Tunnel Complex and Unidentified Building in Myanmar, ISIS, August 3, 2009. http://isis ploads/isis online.org/u reports/documents/Burma_tunnels_3August2009.pdf - 17 DictatorWatch, March 2007, ; “Burma’s Nuclear Secrets.” http://www.dictatorwatch.org/phshows/burmafacility.html 18 Robert K elley, Andrea Scheel Stricker, and Paul Brannan, Exploring Claims about Secret Nuclear Sites in Myanmar, ISIS, January 28, 2010. P a g e ISIS R EPORT 5 |

6 last several years, fueling concerns about nuclear coope ration. North Korea could also supplement Burma’s own foreign procurement networks, and it could sell nuclear goods made in North Korea. For its part, North Korea would find such an arrangement lucrative, and it could use Burma as a willing transshipmen t point, or turntable, for illicit sales for itself or others. Another, albeit less likely, possibility is that North Korea could build sensitive facilities in Burma for its own use. There are lingering questions about two Pakistani nuclear scientists wh o reportedly went to Burma in late 2001, during a time of intense interest over any help these same Pakistani nuclear scientists could have provided al Qaeda in Afghanistan before the fall of the Taliban. The two, Suleiman Asad and Muhammed Ali Mukhtar, r eportedly left Pakistan with the agreement of the Pakistani 19 government to elude questioning by the United States. Burmese officials subsequently denied 20 Their whereabouts or activities since then giving sanctuary to any Pakistani nuclear scientists. rem ain unknown. Namchongang Evidence of North Korean/Burmese cooperation includes the reported presence in Burma of officials from Namchongang Trading (NCG), a North Korean trading company that is sanctioned by U.N. Security Council. Syria’s reactor proje ct depended on assistance from NCG. The nature of the Burmese/NCG cooperation remains largely unknown, but NCG has reportedly sold 21 equipment to Burma or provided some type of technical assistance. As mentioned above, there is North Korea is supplying Burma a reactor, but any involvement by NCG in no concrete evidence that Burma is bound to increase suspicions about such a sale. Reports of North Korea selling a reactor to Burma date back to at least 2004, a time when NCG was 22 Asia Times reactor. helping Syria acquire its article, citing Indian intelligence, According to a 2004 Burma approached North Korea in November 2002 as a seller of last resort after the military regime 23 Russia at the ti failed to acquire a reactor from Russia, China, and India. me had signed only a draft reactor sales agreement. India turned down Burma’s request for a reactor in 2000, according to the article, because of India’s view that Burma did not need such a reactor and was concerned about riling the United States which ha article makes the additional d sanctions on Burma. The Asia Times 24 claim that a reactor deal was signed between Burma and North Korea in early 2004. But all these claims remain unconfirmed. 19 “Pakistani Connection,” The Pioneer (New Delhi), December 19, 2001. 20 France Presse. January 22, 2002. Myanmar Confirms Plans to Build Nuclear Research React - “ or,” Agence 21 Jay Solomon, “Tests Point to Spread of Weapons Trade,” The Wall Street Journal , May 28, 2009; interviews with a senior European intelligence agency official. 22 - Asia Times Arun Bhattacharjee, “India Frets Over Yangon , June 4, 2004. Pyon gyang Deal,” 23 Ibid. 24 . Ibid ISIS R P a g e EPORT 6 |

7 New East International Trading ed three individuals for attempting to illegally export a magnetometer to In June 2009, Japan arrest 25 under the direction of a company associated with illicit procurement for North Burma via Malaysia, 26 sfully delivered Authorities learned subsequently that this group succes Korean military programs. other nuclear dual use equipment to Burma. - The original order for the magnetometer came from the Beijing office of New East International Trading, Ltd., which reportedly operates under the direction of North Korea. The company is rtered in Hong Kong but also has a Pyongyang office, which is flagged by watch lists of the headqua Japanese Ministry of Economy, Trade, and Industry (METI) for its involvement in illicit procurement 27 for North Korean military programs. a dual The magnetometer, which is - use instrument that measures magnetic fields, was intercepted before it made its way to Burma. In addition to legitimate commercial uses in archaeological and geophysical sciences, a magnetometer can be employed in making missile control system mag nets 28 This item is and gas centrifuge magnets (in magnetizing magnets and measuring strength). all” regulations, which ban the export of dual - controlled under Japan’s “catch use items for military - apanese officials seized the item in January applications to countries such as North Korea or Burma. J 2009 and launched an investigation which later led to the arrests. The three individuals, one of North Korean nationality and two of Japanese nationality, were the Gyeong Ho, a North Korean national was president of heads of three separate Japanese entities: Li the Toko Boeki trading company; Hirohiko Muto was president of Taikyo Sangyo trading company (internet searches indicate this may be a clothing company); and Miaki Katsuki, was president of Company. Riken Denshi was the manufacturer of the magnetometer. Riken Denshi In September 2008, Li Gyeong Ho, under direction of the Beijing office of New East International Trading, asked Muto at Taikyo Sangyo to submit documents to the local customs authorities fo r the purpose of exporting the device. METI informed the company that an export license was required 29 and the export could not be authorized. At this time, the accused conspired to export the item to Burma via Malaysia without a license. In January 2009 , the three conspired to replace the name on the customs documents to that of Riken Denshi and tried to export the item for seven million yen, or about $72,500, without a license from 30 METI. The export was stopped by customs agents in Japan, and METI con firmed the company had 32 31 The In February, the premises of Toko Boeki were searched. not applied for an export license. 25 That the item was allegedly intended for transshipment through Malaysia is indicated in: Mari Yamaguchi, “Japan Holds 3 Accused of Trading for NKorea,” Associated Press. June 30, 2009. . http://www.etaiwannews.com/etn/news_content.php?id=990278&lang=eng_news 26 “Japan Holds 3 Accused.” 27 “3 Held Over Export Bid of DPRK Missile Know How to Myanmar,” , June 30, 2009. un The Yomiuri Shimb - http://www.yomiuri.co.jp/dy/national/20090630TDY01304.htm . 28 Use” Technology to Myanmar,” e 30, 2009. “3 Execs Arrested for Attempting to Export “Dual The Mainichi Daily , Jun - http://mdn.mainichi.jp/mdnnews/news/20090630p2a00m0na015000c.html . 29 Ibid. 30 “3 Held Over Export Bid.” 31 “Japan Holds 3 Accused.” ISIS R EPORT P a g e 7 |

8 individuals were charged with violating Japan’s Foreign Exchange and Foreign Trade Law by a license. attempting to export the magnetometer without The magnetometer was not the only item ordered by New East International Trading for shipment to Burma by Toko Boeki. In August 2008, Toko Boeki exported to Burma two small cylindrical grinders, each valued at 2.5 million yen, or about $28,00 0, without permission of Japanese authorities; this type of grinder, which was produced by Manba Seisakusho Co. Ltd, can be used to make missile 33 control systems and to grind magnets for gas centrifuges. In November 2008, Toko Boeki exported another cylin drical grinder to Burma. Burma’s Ministry of Industry No. 2 reportedly received the 34 grinders. In November 2009, Li Gyeong Ho of Toko Boeki trading company was found guilty and given a two year suspended sentence and a fine of six million yen (about $67, 000). In his ruling, the judge said that all these exports or attempted exports involved “all dangerous equipment used to develop 35 and/or manufacture nuclear weapons.” The judge concluded that there was “thus a risk of greatly 36 affecting the peace and sec urity of Japan and the world.” - Although this case implies that North Korea was purchasing dual use equipment for Burma, the investigation did not confirm whether the items were intended for use in Burma in a missile or nuclear program or for shipment on ward to North Korea or another country. Suspicious Procurements by Burmese Educational Entity According to a European intelligence official, in 2006 and 2007 Burma made a series of procurements of extremely high precision, expensive dual - equipment, including computer use industrial - numerically controlled (CNC) machine tools, from companies located in Switzerland, Germany, and Japan. An official from another government knowledgeable about the case confirmed to ISIS these the - line procurements. - top of - The equipment was ordered by an agency of the Burmese government ostensibly responsible for technical education programs in the country, the Department of Technical and Vocational Education (DTVE) under the Ministry of Science and Technology. However, th e equipment is too sophisticated for normal teaching and student endeavors. At the time of the orders, according to a European government official, the head of the DTVE was Dr. Ko Ko Oo, who was also the head of Burma’s Department of Atomic Energy (DAE), also under the Ministry of Science and Technology. Officials in 37 In 2003, both entities the DTVE have significant personnel links and associa . tions with the DAE shared a physical address at the Ministry of Science and Technology, and an official at the DTVE had 32 o Sakamaki, “Japanese Police Search Firm Linked to North Korea, Kawamura Says,” Takashi Hirokawa and Sachik Bloomberg. February 26, 2009. 33 “Tokyo Trader Charged with Selling Sensitive Machines to Myanmar,” Zee News. July 24, 2009; and Summary of , 2009 (translated from Japanese). , Sentence passed November 5 Judgment 34 Ibid. 35 Summary of Judgment. 36 Ibid. 37 Andrea Scheel Stricker, Deep Connections between Myanmar’s Department of Technical and Vocational Education and Department of Atomic Energy, ISIS, January 28, 2010. ISIS R EPORT P a g e 8 |

9 an e - mail address at the Department of Atomic Energy, [email protected] Both ved to the new capital of Naypyidaw. entities have since mo In such a small country, officials might wear more than one “hat,” and nuclear officials might do more than just nuclear. But the connection raises the issue of whether the equipment is intended for a nuclear purpos e or whether the DTVE acts as a procurement front for the Department of Atomic Energy or a military entity. though if the equipment were ultimately used — It is unclear if the procurements in Europe were legal ements should be against the law in most European in a military or nuclear program, these procur countries. The procurement route and the export’s legality are unknown for the equipment sent from Japan to Burma. - Upon closer examination by European officials, the declared end use of the computer ically numer controlled (CNC) machine tools did not look credible. According to one European intelligence official, the declared end use had too many inconsistencies to believe what was claimed. Some of the CNC ght meters, and declared for use in manufacturing equipment was very large, with a base of about ei sophisticated locomotive diesel engine parts. But designs of parts given to suppliers appeared incomplete; they were missing key tolerances. Officials suspected that the designs were phony and nt would actually be used to manufacture other parts. In addition, the quality and price the equipme of the equipment is beyond what Burma would be expected to purchase or need, given its relatively for expanding this primitive diesel locomotive manufacturing base and its modest plans 38 manufacturing capability. European intelligence services yielded that the equipment was multi - purpose, running the gamut of - possible uses, including turbines in aircraft, high technology civilian manufacturing, missile parts, or nuclea r component manufacturing. The equipment appeared oversized for gas centrifuge manufacturing. It could still be used to make centrifuge parts, but it is uneconomical to buy such large equipment for this end use. In addition, the equipment appeared too p recise for missile manufacturing, but it could still be dedicated to such a purpose. ISIS has learned that two sets of this high precision equipment were sent to two separate industrial - looking; they s are said to be similar buildings, at least one of which was recently built. Both building are located a distance from any major city and have extensive security. Figure 2 shows one of the buildings, which is a large, blue roofed structure located ten miles - ’s Defense Services Academy training facility and northeast of the town Pyin Oo Lwin, where Burma other military installations are located, and about 35 miles from Mandalay, the nearest major city. This building is at the end of a long road set back from the main highway and appears remote. shows the second building. It is located approximately 80 miles west of Mandalay Figure 3 ( ) (see figure 4). It has very similar characteristics to the first building near Pyin 21.723862, 94.766464 d and sits on a wide foundation; its side Oo Lwin. The building is located on an isolated compoun lengths are essentially identical to the first building (~80 meters), the roof is vaulted and it appears to 38 er on Inspection Tour of Myitnge Carriage and Wagon Workshop, Ywahtaung Diesel Locomotive Shed,” “Prime Minist and lm/n070420.htm http://missions.itu.int/~myanmar/07n , September 27, 2006. See also The New Light of Myanmar http://www.mrtv3.net.mm/open3/010507tran.html ISIS R EPORT P a g e 9 |

10 be blue in color (see figure 5). A European intelligence agency confirmed to ISIS that this is indeed second building. the The buildings’ distance from a major city is odd because one would expect facilities that make locomotive engines or sophisticated parts to be near a major city and a skilled civilian work force. In contrast, a workforce operating at th e first building in figure 2 would need to travel about one hour by bus from Mandalay to reach it. In fact, the equipment would be expected to go to existing diesel locomotive manufacturing facilities, in particular the Insein Locomotive Shed and the Ywah taung Diesel Locomotive Shed, both of which were being upgraded in 2006 to make diesel locomotives and 39 are located near Yangon and Mandalay, respectively (see figures 6 and 7). The building in figure 2 was built inside a deep hole, according to an intell igence official. It appears to foot wide road leading to the building. - be a large industrial building (270 feet on each side) with a 40 The width of the road would imply the use of long trucks or trucks hauling wide or long objects. images of the building seen in figure 2 dating to 2005, early in its construction Commercial satellite phase, show large, sturdy foundations, but the building judged as unsuitable to support a nuclear 40 reactor. suggests the building is not for Additionally, no railroad tracks are visible in figure 2, which assembling locomotives. At first, European analysts believed that Burma was not the actual end user of these sophisticated e imports, and thought perhaps North Korea was the hidden buyer. The buildings lacked vital climat control equipment, including air conditioning. Because excess humidity can damage the dual - use equipment, initial assessments assumed that Burma intended to ship the equipment elsewhere. But 2009, the equipment was still in Burma. In additio as of mid n, no connection to another country has - been established. Some speculate that North Korea could locate military industries inside Burma. But is the Burmese workforce sufficiently trained to operate them for North Korea? The workforce in North Korea is ore highly skilled, and North Korea can procure CNC machines for itself. Nonetheless, a joint m Burmese/North Korean military or nuclear enterprise might make sense. The question that remains is what is Burma planning to do with the equipment in these bui ldings? Is the planned use really for making locomotive diesel engine parts or is it related to nuclear, missile, or conventional weapons? A key challenge is how to determine the true purpose of these imports of sophisticated machinery and ensure that fu ture ones are subject to more scrutiny by supplier states. 39 Information Sheet, Myanmar Information Committee, Yangon, September 27, 2006: http://www.myanmar - information.net/infosheet/2006/060927.htm 40 http://www.armscontrolverification.org/2009/08/box - in - burma - p reliminary - analysis.html ; See also Imagery Brief of Tunnel Complex and Unidentified Building in Myanmar, ISIS, op. cit.; http://www.armscontrolwonk.com/2407/big - odd - box - the - on - http://www.armscontrolwonk.com/2412/oconnor ; and bob myanmar - ISIS R EPORT P a g e 10 |

11 Conclusion and Policy Recommendations: - There remain sound reasons to suspect that the military regime in Burma might be pursuing a long ublic reports to the contrary, the military junta term strategy to make nuclear weapons. Despite the p does not appear to be close to establishing a significant nuclear capability. Information suggesting the construction of major nuclear facilities appears unreliable or inconclusive. to suspicious procurements likewise remains uncertain. The procurements are Assigning a purpose multi purpose and difficult to correlate conclusively with a secret missile or nuclear program. - ho is helping Although Burma and North Korea appear to be cooperating on illegal procurements, w who cannot be determined with the available information. Is North Korea helping Burma acquire nuclear, conventional weapon, or missile capabilities or is Burma assisting North Korea acquire this equipment? Nonetheless, the evidence suppor ts that the regime wants to develop a nuclear capability of some type, but whether its ultimate purpose is peaceful or military remains a mystery. The outstanding rtain if questions about the regime’s activities require that there be more scrutiny of Burma to asce there is an underlying secret nuclear program. Because Burma’s known nuclear program is so small, the United States and its allies have an opportunity to both engage and pressure the military regime ult for Burma to acquire a nuclear weapons capability, in a manner that would make it extremely diffic let alone nuclear weapons. A priority is to establish greater transparency over Burma’s and North Korea’s activities and inhibit - is ensuring that Burma is not use transfers to Burma. A related problem any nuclear or nuclear dual helping North Korea acquire nuclear and other military goods illegally. Vigorous implementation of the recent U.N. Security Council Resolution 1874 on North Korea is helpful to these goals. The U.S. uld continue to press Burma’s military regime to abide by this resolution. and other governments sho To reinforce this message, Burma should be made more aware of the penalties of being labeled a pariah state. h the military dictatorship with The United States and its European allies have strained relations wit few opportunities to appeal to Burma’s military regime. At the same time, the regime has demonstrated little interest in breaking out of its isolation, although it has shown a recent interest in ates. The Obama administration is right to try to exploit this interest by engaging with the United St attempting to engage with the regime, despite the obvious difficulties. A stated U.S. goal is to induce the regime to break or diminish its relationship with North Korea. Russi a should be privately encouraged that before it provides Burma with a research reactor, the regime needs to meet a set of specific conditions. More effective safeguards would be the principle condition, including the Additional Protocol along with upgrade d safety and security infrastructure. Also necessary are verifiable commitments by the Burmese regime to not procure equipment illicitly and to abide by U.N. Security Council Resolution 1874, which would mean Burma would not buy any uipment, or materials from North Korea. nuclear facilities, eq Burma’s suspicious procurements as well as its cooperation with North Korea should cause suppliers to be more vigilant. Suppliers need to exercise greater caution about enquiries from Burmese ISIS R EPORT P a g e 11 |

12 in other countries where there is an indication that goods are destined for entities or companies Burma. Governments should warn their companies about possible attempts by Burma to acquire high precision machinery or other sensitive dual use items. The countries that suppli precision - ed the high equipment in 2006 and 2007 should find a legal justification to press for access to the equipment in order to verify that it is being used for its declared purpose. In these discussions, the United The United States is planning to hold more discussions with Burma. States should press for access to certain suspicious sites as a way to build confidence. The Syrian reactor, Iran’s gas centrifuge uranium enrichment program, and Pakistan’s highly enriched uranium program were all enab led in large part because of the failure of the international community related technology. The international community has a unique - to halt the illicit sale of nuclear ld opportunity to set a new precedent and prevent Burma from acquiring materials that cou eventually be used in an unsafeguarded nuclear program. Burma has no reason to seek nuclear weapons. The international community should convince Burma that pledging not to do so in a truly verifiable manner could provide significant benefits. Figu Ground photograph obtained by Bertil Lintner at YaleGlobal Online. ISIS assessed that this photograph depicts a re 1. dam penstock. ISIS R EPORT P a g e 12 |

13 roofed structure located ten miles northeast of the town Pyin Oo Lwin, where Burma’s Defense - A large, blue Figure 2. Se rvices Academy training facility and other military installations are located, and about 35 miles from Mandalay, the nearest major city. ISIS learned that a set of high precision equipment was sent to this building. Upon closer examination by European of ficials, Burma’s declared end use of the equipment did not look credible. Figure 3. ISIS learned that another set of the high precision equipment in the first building was also sent to this building. 13 | P a g e EPORT ISIS R

14 Figure 4. The buildings are located west and ea st of Mandalay. The building in Figure 2 is located in the area circled to the east of Mandalay. The building in Figure 3 is in the area circled to the west of Mandalay. - side comparison of the two buildings. The building on the l - by eft is seen in figure 2, the building on the A side Figure 5. right is seen in figure 3. The buildings both have nearly identical side lengths of approximately 80 meters. Both have vaulted roofs, which appear to be blue in color. Both are located on isolated compounds a nd both buildings are placed on top of wide foundations. 14 ISIS R EPORT P a g e |

15 view image of the city Yangon in Burma. The Insein Locomotive Shed is likely located within Insein - . A wide Figure 6 Township, circled in blue. 15 P a g e EPORT ISIS R |

16 wahtaung Diesel Locomotive Shed is likely located in the area circled in view of Mandalay in Burma. The Y - Figure 7 . Wide blue. | P a g e EPORT ISIS R 16

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